Has HMRC Requested a Tax Return for Your Dormant Company?
You may have received a Notice to Deliver a Company Tax Return for a Limited Company which you have not actually used. It is common for people to have registered a Limited Company at Companies House but not traded through it. For example, they are holding a name of a Limited Company for a future business idea or trade has been wound up but they still own the Limited Company. If this is the case for you, then you may not need to submit a Tax Return for your Dormant Company.
It is however important to note that if you have a Dormant Company, it is your responsibility to let HMRC know the Company Status and that no Corporation Tax Return is due otherwise HMRC will issue automatic penalties starting at £100 and escalating thereafter the longer you leave it.
If You Have Never Traded through Your Limited Company
When you formed the Company, if you did not let HMRC know straight away that the Company was dormant then their computer system will automatically issue you with a Notice to Deliver a Company Tax Return (CT603) under the assumption you are doing business. Once this letter has been issued HMRC will be expecting you to file Tax Returns for the Company and failure to do so will result in automatic penalties.
If You Previously Traded but the Limited Company is Now Dormant
HMRC will operate on the expectation that you are still trading and expect to receive a Corporation Tax Return as in previous years. Therefore a Notice to Deliver a Company Tax Return (CT603) will be automatically sent to you, as in previous years. You must now take steps to inform HMRC that the Company is now dormant and they should no longer expect to receive Corporation Tax Returns (CT600).
How to Notify HMRC of Dormant Company Status
Here are the two ways which you can notify HMRC of Dormant Company Status yourself and a template letter you can download and send to HMRC:
1 . Complete Nil Returns: you can still submit the requested Corporation Tax Returns to HMRC with zero in the boxes. However if you currently have no intention of trading and expect your Limited to Company to remain Dormant then this many not be the best option since HMRC will continue to send out Corporation Tax Returns each year so you will need to repeat this process, possibly incurring the cost of an accountant.
2 . Write to HMRC – Firstly you will need to Complete Your Dormant Company Accounts and file them with Companies House. Once these are accepted you can then write to HMRC to inform them that the Company is Dormant and will remain Dormant until further notice. Enclose a copy of the Dormant Company Accounts from Companies House as evidence of the Dormant Status. HMRC will then update their systems and you will no longer receive a Notice to Deliver a Company Tax Return (CT603) each year, as they will understand that this form is not required. Send your letter to HMRC at this address:
Corporation Tax Services
HM Revenue and Customs
Always include the Company Name and Unique Tax Payers Reference on your letter and ensure it is signed by a Director of the Company. You can find the Company’s UTR number at the top of any correspondence you have from HMRC or within your HMRC Business Online Account, under Corporation Tax.
If you have lost your Company UTR then you will need to call HMRC on 0300 2003410. You must be a Company Director and they will ask various security questions, including your Registered Office address. They are unable to issue this over the phone, but will be able to help you retrieve your Lost UTR.
Download a Sample of the Letter Now
You will also need to file Dormant Accounts at Companies House every year, unfortunately this annual process cannot be avoided and missing this filing deadline will result in Penalties. We have created a step by step guide to completing and filing Dormant Accounts at Companies House which you can find here.
If your Dormant Company Starts to Trade
If you do start to trade then it is your responsibility to notify HMRC that you have done so and need to file Corporation Tax Returns and pay corporation tax. You can do this by letter, writing to the above address, by phone (0300 2003410) or by signing up online with HMRC for a business account so you can view your taxes online.